Watchung's housing market is defined by large lots, mature trees, and a low-density, established character. The borough is largely built out, with a stock of colonial-style, ranch, and contemporary single-family homes set back from winding, wooded streets, many on half-acre to multi-acre parcels. New construction is limited by the borough's hillside terrain and open-space protections, so the market skews toward resale of well-maintained homes rather than large new subdivisions. Buyers are typically drawn by privacy, space, and the borough's school reputation, and the market retains a consistently upscale suburban profile.

Watchung is small—under six square miles—and its neighborhoods are less a set of named subdivisions than a continuous band of wooded residential streets spread across the ridgeline. Homes cluster along the hillside roads that wind through the borough, with Watchung Lake and the town center providing focal points. The terrain creates natural separation and privacy, with many properties backing to woods or slopes. Rather than dense blocks, Watchung reads as a collection of quiet, landscaped enclaves connected by a handful of main roads, giving the whole borough a cohesive, park-like feel.

Watchung offers a calm, family-oriented suburban lifestyle with unusual natural surroundings. Residents enjoy wooded, hilly terrain, low traffic, and a strong sense of privacy, while remaining within commuting distance of New York City and the region's employment centers. The borough's schools and recreation facilities anchor community life, and nearby towns provide shopping and dining. The adjacent Watchung Reservation extends the borough's outdoor character, offering trails and open space at the doorstep. Life here skews residential and unhurried, with the pace of a well-established New Jersey suburb rather than a bustling downtown.

Watchung's public schools are a central draw. Students in pre-kindergarten through eighth grade attend the Watchung Borough Schools, a small district of two schools, and then move to Watchung Hills Regional High School, which serves Watchung along with neighboring communities. The regional high school district has been classified by the New Jersey Department of Education in its upper District Factor Group, reflecting the area's socioeconomic profile, and offers Advanced Placement and other college-preparatory programs. For families, the progression from a small local K–8 district to a well-regarded regional high school is a key part of Watchung's appeal.

Watchung sits directly on Interstate 78, with an interchange in the borough, and lies close to U.S. Route 22, two of the region's principal east-west corridors. New York City is about 29 miles to the east, and Newark Liberty International Airport is roughly half an hour away. Commuters to Manhattan typically drive to a rail line—NJ Transit service is available at nearby stations—or use express bus service from the Route 22 corridor. The borough's hillside road network favors car travel for local errands, but its position between Route 22 and I-78 keeps most of the region's employment centers within reach.

The Watchung Reservation is Watchung's greatest recreational asset. This 2,000-acre Union County preserve begins near the borough and offers miles of hiking and bridle trails, picnic areas, and the Deserted Village of Feltville, a restored 19th-century mill village. Within the borough, Watchung Lake provides a scenic centerpiece for walking and community activities, and the borough maintains additional parks and open space. The Watchung Mountains themselves define the area's character, with ridgeline views and wooded terrain. For organized sports and recreation, the borough's fields and the regional high school's facilities serve local families.